a) Armenia / b) Constitutional Court / c) / d) 18-04-2006 / e) DCC-630 / f) On the conformity with the Constitution of Article 218 of the Armenian Civil Code, Articles 104, 106 and 108 of the Armenian Land Code and Decision of Government no. 1151-N of 01.08.2002 / g) to be published in Tegekagir (Official Gazette) / h) CODICES (English).
Keywords of the Systematic Thesaurus:
General Principles - Proportionality.
General Principles - Weighing of interests.
General Principles - General interest.
The state shall set out within legislation the procedure of expropriation. The owner will be entitled to an explanation before the event of the reason for this interference with his right to property and of the specific needs of the state which provide the rationale behind the expropriation. In any case, where there is interference with the right to property, by implication there must be a fair balance between the overriding interests of society as a whole and the need for a guarantee of fundamental human rights.
If expropriation takes place outside a clear legislative framework and without regard for restrictions imposed by the Constitution on the procedure, then such interference with property will not be deemed proportionate.
I. The Human Rights Defender of the Republic of Armenia applied to the Armenian Constitutional Court for a ruling upon the conformity of Article 218 of the Civil Code, Articles 104, 106 and 108 of the Land Code and the Decision of the Government of 2002, 1 August, 1151-N with Article 31 of the Constitution.
Article 31 of the Constitution bestows the universal right to dispose, use, manage and bequeath one's property at will. The right to property may not be exercised so as to cause damage to the environment or to infringe the rights and lawful interests of other persons, society, or the state.
No one may be deprived of private property except by a court in cases prescribed by law.
Private property may be expropriated for the needs of society and the state only in cases of exceptional and overriding public interest, with due process of law, and with prior equivalent compensation.
The Applicant argued that the legal norms in question were in conflict with the Constitution because:
1. There is no clear definition of "public and state needs" and "cases of exceptional and overriding public interest" in any of the challenged legislation. Legislation alone forms the basis for restriction of right to property. Furthermore, the articles of the Civil Code and Land Code mentioned above do not set out a sufficiently clear and rigorous procedure for taking parcels of land for "state needs".
2. There should be separate legislation to regulate this type of issue of public law. There is no specific definition within the existing law of property of "exceptional importance" and "expropriation", neither is there any mention of the type of state or public need which might be satisfied by the property which is seized.
II. In its interpretation of Article 31 of the Constitution, the Constitutional Court made the following observations:
- There are cases where rights are restricted, when the Constitution itself determines the criteria and framework of the restriction and does not bestow any competence upon the legislator. Property rights may only be restricted in cases prescribed by law. Any deprivation of property has to be carried out in a judicial manner as a compulsory act. "Expropriation of property" is a different concept from "deprivation of the property". It should be exercised on the basis of Article 31.3 of the Constitution.
- The Constitution provides for the possibility of restrictions on the right to property and expropriation of property.
- Expropriation may only be carried out for public and state needs which should be clearly expressed and directed at a particular property.
- These needs should be exceptional and in the overriding interests of the state or society.
- The procedure of expropriation should be determined by legislation.
- Advance compensation should be guaranteed when property is to be expropriated.
- The compensation should be of equivalent value.
Having regard to the law pertaining to human rights, to precedents within constitutional law and international law on the protection of the right to property and on expropriation of property for public needs and in view of the new legal requirements formulated as a consequence of the most recent amendments to the Constitution, the Constitutional Court ruled that the government should not be allowed to define through its decisions the procedure of expropriation of property for state needs. This is directly related to the question of restrictions on the right to property and guarantees should be in place to ensure a balance between public interest and individual property rights.
On the basis of the requirements of Articles 3, 5, 8, 31, 43 and 83.5 of the Constitution, the legal procedure and framework for the expropriation of property for public and state needs should be set out clearly in legislation. The basic premise of such legislation must be that the right to property may only be restricted or terminated in cases prescribed in Article 31 of the Constitution. The law shall determine the procedure of expropriation by specifying:
a. the state agency which will decide whether expropriation should take place;
b. the procedure for providing advance compensation of equivalent value (whether in kind or in monetary form) for the property which is to be seized;
c. the procedure for appealing against the expropriation and the procedure under which it is carried out (for instance where there might be disagreement over the amount of compensation);
d. the obligations and restrictions attached to the rights of the owner of the property to be seized;
e. the procedure for legal execution following the expropriation and any new rights which may arise;
f. instances where there may be different owners of the property for defined legal objectives.
According to the Constitutional Court, where property is seized with no consideration as to future ownership (whether the property should pass to the state, to the local community or to another natural or legal person), the legislation shall determine a guarantee for the use of this property for the needs of society on the basis of which the expropriation was carried out.
The legislation should also stipulate that the state or its appointed agent should enter into a contract with the owner as to the expropriation and the compensation to be paid. Bilateral obligations will be clearly set out, as well as a stipulation that compensation from such contracts is not to be regarded as taxable income.
The Constitutional Court went on to state that the legislative and government authorities have not created the legal norms within the Armenian legal system to implement the requirements of Article 31.3 of the Constitution. Where there is expropriation of property for reasons of the needs of the state, the requirements of Article 31 of the Constitution should form the basis of any legal act. Constitutional human rights should be considered as the superior value and as a directly applicable right.
The Court carried out a constitutional analysis of Article 218 of the Civil Code, Articles 104, 106, 108 of the Land Code, the Decision of the Government of the RA 1151-N as well as its own law-enforcement practice. It ruled that the legal norms mentioned above do not result in guaranteed constitutional protection of property rights. They do not secure a fair balance between individual interests and property rights and public interests as defined according to the rule of law. Neither can the protection of property rights be guaranteed, based on the reasoning of "exceptional overriding public interests".
The Constitutional Court held that Article 218 of the Civil Code, Articles 104, 106 and 108 of the Land Code, and the Decision of the Government of 1 August 2002, 1151-N were not compatible with the requirements of Articles 3, 8.1, 31.3, 43, 83.5.1, 83.5.2 and 85.2 of the Constitution. The Constitutional Court also ruled that these legal norms would become invalid directly the new legislation governing expropriation of property for the needs of society as a whole came into force, but no later than 1 October 2006.